In 2015, the European Commission ordered Starbucks and Fiat to each pay €20m–€30m in the Netherlands and Luxembourg, respectively, as their tax arrangements were found to constitute illegal state aid. On 24 September 2019, the General Court upheld the Commission’s Fiat decision, but annulled the Starbucks decision. What were the key economic issues in these cases, and what are the implications of the judgments?

Investors’ holdings in multiple firms give rise to what is known as ‘common ownership’. Are the strategic decisions of competing firms affected by the presence of common ownership? Albert Banal-Estañol of Universitat Pompeu Fabra, Barcelona GSE and City University of London, and Melissa Newham and Jo Seldeslachts of DIW Berlin and KU Leuven, provide evidence on the impact that common ownership has on market entry, one of the most important strategic decisions that firms make, in US pharmaceutical markets

‘Superstar firms’ are increasingly dominating markets. Network effects may consolidate the position of these firms, but they can also help new entrants to undermine them. In some markets, network effects will both dampen competition ‘within’ the market and spur competition ‘for’ the market. Francesca Arduini, Oxera Analyst, argues that we can employ the framework of evolutionary game theory to derive four key policy insights into this topic

When does price discrimination by a dominant firm amount to an abuse? Is the mere existence of a price difference sufficient? A recent ruling by the Court of Justice of the European Union (CJEU) provides some guidance on these questions, highlighting the ability to distort competition as a key criterion for a finding of abuse. Taking an economic perspective, we look at the CJEU’s approach and consider the implications for other cases of discrimination more broadly

The UK is experiencing a backlash against the liberal orthodoxy of utility regulation of ten years ago, which was based on privatisation, competition and deregulation. A recent Agenda article on the legitimacy of sectoral regulation in the UK asked ‘Is it policy, ownership, industry structure, governance, financing or regulation that is driving the problem?’ Martin Cave, Visiting Professor, London School of Economics, provides his perspective

Are patent settlement agreements in the pharmaceutical sector an infringement of competition law by object? Could they be an infringement by effect? The March 2018 judgment of the UK Competition Appeal Tribunal (CAT) on the paroxetine case, which referred these key questions to the Court of Justice of the European Union (CJEU), sheds some light on the matter. What can we learn about both the judgment and the questions in light of the growing economic literature on patent settlements?

UK regulated utilities are facing the tightest scrutiny that they have experienced in years. A tit-for-tat battle between the two main political parties in proposing changes to address public concerns has culminated in the Labour Party proposing renationalisation and the Conservative Party greater regulatory supervision. So what is the regulatory outlook for customers, companies and their investors in the context of the renationalisation agenda and other recent developments?

In the UK, complex decisions by economic regulators for their respective sectors are reviewed and appealed according to bespoke regimes, and decided by specialist bodies such as the UK Competition and Markets Authority (CMA). Dr Gavin Knott, Director (remedies, business and financial analysis) at the CMA, looks at the current appeal regimes and how they might develop in future

Are there good reasons for manufacturers to prevent retailers from distributing their products
through third-party online platforms? On 6 December 2017, the European Court of Justice
delivered a ruling on Coty, finding that, under certain conditions, manufacturers of luxury brands
can restrict sales through particular online channels without raising competition concerns. What
is the economic case for and against such restrictions, and is the Court’s judgment consistent
with the economics?

In the EU, state intervention to assist firms in financial difficulty is often justified by demonstrating that the aid is compatible based on the European Commission’s Rescue and Restructuring Aid Guidelines. However, these Guidelines impose restrictions on firms’ activities, which can tie the hands of the beneficiary, limiting the options to ensure a return to financial viability. But can state intervention be justified on commercial grounds by focusing on the state’s overall portfolio of assets?

Competition policy and regulation are increasingly focusing on fair pricing, and various tests have been developed for assessing when prices are excessive or unfair. Do these tests differ in the case of intellectual property? And how have they been implemented in recent cases concerning copyright and standard essential patents?

Competition authorities have historically pursued very few cases against excessive pricing. This seems to be changing. In the past 12 months, the rules on abuse of dominance have been invoked to tackle high prices in a range of markets, including pharmaceuticals, musical works, and patents. Together with increased political calls for fairness to consumers, does this mean a revival of excessive pricing in competition law?

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